ALL ABOUT L-1A AND L-1B STATUS

An L-1, or inter-company transfer visa, is one of many options that can be used to bring a foreign national to the United States for work. The L-1A visa is reserved for executives or managerial employees being transferred from a foreign company to a related U.S. company. The two companies must be legally related and one must own at least fifty percent of the other company. For example, we often see corporate relationships such as a foreign parent company transferring the employee to a U.S. wholly or majority owned subsidiary or branch office. The L-1 can be used to open a new U.S. corporation and office and to start a business inside the United States. The L-1 visa holder must be able to show that s/he has worked for the foreign company for at least one year in the past three years and that s/he is either an executive or manager, for L-1A status, or an employee with specialized knowledge for L-1B status. If the U.S. entity is already established, then the L-1 will be initially approved for 3 years. If the L-1 visa holder is coming to the U.S. to open a new office, then the L-1 will be approved for one year, and can later be extended. The L-1A can be extended for up to a total of seven years, while the L-1B can be extended for up to a total of five years. The L-1 is a nonimmigrant status, meaning it does not automatically lead to U.S. Permanent Residence or a Green Card. However, a person in L-1 status can apply for U.S. Permanent Residence in a parallel process. L-1A visa holders that qualify can apply for U.S. Permanent Residence designed especially for L-1A executives and managers. This process is faster in that L-1A visa holders may skip the first step of the normal green card process, Labor Certification, and go straight to the I-140, step 2 into a faster line for green card processing called Employment Based–One or EB-1. A well prepared and successful application for U.S. Permanent Residence in the EB-1 category as a multinational executive or manager can lead to U.S. Permanent Residence in less than one year. L-1B visa holders are not eligible for this speedy permanent residence process but can pursue U.S. Permanent Residence via the traditional method, filing a PERM Labor Certification in either the Employment Based-Two (EB-2) or Employment Based-Three (EB-3) categories.

The following outlines the main requirements for L-1 status, all of these requirements must be met in order to secure approval of an L-1:


What is the definition of an L-1A Executive or Manager?

The definition of manager includes an employee who manages an essential function of the business within a qualifying organization. Specialized knowledge employees must have special knowledge of the organization’s product, service, research, equipment, management, or other interests and its application in international markets, or an advanced knowledge or expertise in the organization’s processes and procedures. Classifying the employee in the right category is important, particularly if the company might later want to sponsor the employee for permanent residence.

Qualifying Corporate Relationship.

The U.S. entity must be majority owned by the foreign entity OR the foreign entity must be majority owned by the U.S. entity;

Twelve Months Employment Abroad.

The employee must show paystubs or foreign tax returns to prove continuous employment abroad by a qualifying foreign employer for one year within three years prior to the employee’s application for admission into the United States.

No Degree Required.

The employee is not required to show a university diploma or university study;

Can be a new U.S. Office or an Existing U.S. Office.

The L-1 visa holder can enter the U.S. to open a brand new office or be transferred to an existing U.S. office. The U.S. employer can be a start-up, with no financial history and only a business plan to share with Immigration or it can be an established corporation with employees and a financial history in the U.S. However, for extension beyond the first year, Immigration will want to see that the U.S. office is following the business plan and moving towards a successful established business in the U.S.

Proper Incorporation.

Immigration does require that the employer sponsor be properly incorporated and possess a valid Federal Employer Tax Identification Number from the Internal Revenue Service.

Commercial Address.

Immigration does not like to see U.S. businesses being run out of a home office. It is wise to secure a commercial address shortly after arriving in the U.S.

L-1 Visa Holder Salary.

The L-1 visa holder must be paid at least the salary as listed on the L-1 petition forms. However, this salary can be paid inside the United States via the U.S. payroll OR via a foreign payroll. Please note that if the L-1 visa holder is not on the foreign payroll and being compensated by the U.S. company, then the L-1 visa holder should receive payment via W-2 payroll. The company should withhold taxes and issue a Form W-2 at the end of the tax year.

Cannot Work for Other U.S. Companies.

Remember that the L-1 visa holder can only receive compensation from the U.S. company listed on the L-1 petition forms. Unlike the H-1B visa, the L-1 cannot be easily transferred to other U.S. based sponsors.

Spouses Holding Valid L-2 Visas Can Work for Any U.S. Employer.

One of the great benefits of the L-2 visa, is that spouses can obtain an Employment Authorization Document or EAD Card valid for work with any U.S. employer. Unfortunately, children in valid L-2 status are not eligible for the EAD Card.

L-1 Visa Holders, L-2 Spouses and Children Can Study.

L visa holders, both the principal L-1 visa holder and the dependent family members can legally study while inside the U.S.

Period of Approval.

One can hold L-1A status for up to a maximum of seven years. One can hold L-1B status for up to a maximum of five years. After the seven or five years allotted, the employee must spend one year outside the United States before s/he is entitled to re-enter in L-1 status.